According the the Diplomat, the United States is considering lifting the arms embargo on Vietnam when President Obama visits Hanoi next month:

As Obama prepares to visit Vietnam as part of a broader trip to Asia next month, the lifting of the embargo is “under discussion” by both sides, a Vietnamese source told The Diplomat.

Publicly, U.S. defense officials have remained mum about the move, in part because, like the October 2014 easing, a full lifting of the embargo requires a State Department policy decision following interagency discussions and consultations with Congress. That decision would be based on several factors, including improvements in Vietnam’s human rights record.

“We have made it clear that progress on human rights is important for the United States to consider a full lift of the ban on the transfer of lethal defense articles,” David McKeeby, a spokesperson for the U.S. State Department’s Bureau of Political-Military Affairs, told The Diplomat.

The report should be taken with a few healthy grains of salt. But if the embargo were lifted, it would be big news indicating just how much China’s island building has changed the rules of the regional game.

Meanwhile, after announcing it would buy new submarines from France instead of from Japan, Australia also inked a $1.22 billion deal with the United States for up to 450 advanced missiles and other equipment. It seems clear that despite fears Canberra might be looking to appease Beijing, the Aussies are still moving ahead with their ambitious defense plans.